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Karl Slym has a Fix for the ailing Tata Motors
Karl Slym wants to change the way Tata Motors makes and sells its cars. But the cars he has don’t sell; and his idea of those that will should take at least two years to hit the market
Image: Vikas Khot
Karl Slym
Age : 50
Career : Started at Toyota as senior manager; spent more than 25 years in GM across roles and geographies, including seven years as head of GM’s India operations. Joined Tata Motors in October 2012.
Education : MSc in business administration, Stanford University
Interests : Music, Bollywood, cricket and travelling
It was October 2012. Karl Slym, the new managing director of Tata Motors, had just joined office. And he was keen to get a pulse of the organisation quickly. Slym asked Tapan Ghosh, regional manager (west) in the passenger vehicles division, to fix up a meeting with Kasturi Wasan, owner of Wasan Motors, one of the oldest and largest dealers of Tata cars in the country. The meeting was fixed at Wasan’s Tata-Fiat dealership in Chembur, Mumbai, at 5 pm. Slym walked into Wasan’s sprawling fourth floor office, overlooking the Sion-Trombay road, with two of his colleagues—Prashant Fadnavis, head of marketing services, and Ghosh. After exchanging pleasantries, Slym got down to business, “So Mr Wasan, how is it going?”
Wasan had been waiting for this opportunity for a long time and he didn’t hold back. Sales had plummeted to 225 units per month compared to an average of 900 units in 2008-09. Despite all kinds of marketing pushes—buy a Nano with a credit card, exchange your old motorcycle for a Nano—the car had remained a non-starter. It was the same story with the Manza, the Indica, the Safari and the Aria. There were hardly any footfalls in his showroom and his sales staff was demoralised.
“With these issues, I will not have enough money to even pay salaries to my staff. In fact, I have been thinking of closing this dealership because I have been making losses for the last two years,” he told Slym.
The new MD heard him out patiently. At the end of the meeting, which lasted about 90 minutes, Slym said, “No, Mr Wasan, don’t give up. Give me 90 days and I will do something. If you still think your dealership is not viable, then you are free to go.”
A former Tata Motors senior official, who spent more than a decade at the company and spoke on condition of anonymity, says this is the result of lack of focus, poor allocation of resources and narrow vision for the car business. “In the last five years, there were just too many things vying for attention. First, there was making the Nano itself. Then Singur and taking the plant to Sanand. Then fires in the Nano. Then Jaguar Land Rover. All of this meant that everything that had been planned for the car business was getting postponed. And we never had enough money to invest in building a pipeline for our existing brands,” he says.
Of course, Cyrus P Mistry, the chairman of Tata Sons, has taken notice. He asked the organisation to buckle up in his Lake House address to employees on April 1. “The last four years witnessed fierce competition in the passenger car market, with the entry of seven new global manufacturers and the introduction of 150 new models. The commercial vehicle segment too faced challenges with the entry of new players like Bharat Benz,” he said. “It is time to meet them and beat them in their backyard.” In his meetings with the top management, Mistry has been pushing towards making the car business profitable, developing “futuristic products that are truly world class” and to draw lessons from the turnaround of Jaguar Land Rover.
Lord Kumar Bhattacharyya, founder and chairman of the Warwick Manufacturing group, who was part of the five-member search committee that selected Mistry as Ratan Tata's successor believe Mistry will do he can to make the company a success. “Let me tell you, Cyrus is a very forensic man. He has got a tremendous mind. And he will not go on a whim or fashion, he will do whatever is right for the company as a business. And it has to make money. Cyrus is not going to tolerate any weaknesses in the organisation. Car companies cost a lot of money, they should not only be designed well but also made well and sold well.”
Lord Bhattacharyya should know. He has seen the company’s steep decline from close quarters and believes that Ratan Tata’s vision for the car business was let down by the senior management at the company. “Ratan, as far as cars are concerned, it is in his blood. But he is not going to go and sell cars. It is up to Tata Motors to sell. Somehow, Tata Motors lost touch with the market. They had an iconic car like Nano, which Ratan had produced but it never got the due respect in marketing. If it was in any other country, it would have been a great success,” he says.
The Problem
The story of Tata Motors is also the story of two companies: Tata Motors India and Jaguar Land Rover (JLR). Its current state of affairs reflects in its financial performance.
Now contrast JLR’s performance with Tata Motors’ Indian operations. While the company does not release separate numbers for its car and commercial vehicles business, Tata Motors’ net profit from its Indian operations has dropped by almost 40 percent in the last five years. The company reported a net profit (standalone) of Rs 1,242 crore in March 2012 compared to Rs 2,029 crore in March 2008. Its return on capital employed (ROCE) from its India (standalone) operations has dropped from 18.96 percent in March 2008 to 10.36 percent in March 2012. The company’s standalone net cash from operating activities has dropped from Rs 6,154 crore in March 2008 to Rs 3,653 crore in March 2012.
Jinesh Gandhi, equity research analyst at Motilal Oswal Securities, says, “Right now, the private vehicle [car] business is being funded by the commercial vehicles [trucks and buses] business and contributions from JLR. There are no restrictions in terms of movement of cash across divisions. But going forward it is not going to be that easy. The commercial vehicles business is going through a cyclical downturn which we hope will make some recovery next year. And JLR has its own investment commitments of about £2.5 billion next year and the year after that. So free cash flow will be curtailed.”
This is where Karl Slym’s million-dollar assignment comes in. Can he change the fortunes of this division of Tata Motors? He’s confident he can.
Losing Touch with the Market
But first, Tata Motors must get back in touch with the market. Let’s understand how it lost touch in the first place.
There’s the story of Safari18. In early 2006, the Safari18 project was initiated at the Engineering and Research Centre at the Tata Motors plant in Pune. The old Safari had been Tata’s workhorse in the sports utility vehicle (SUV) segment for over seven years and it urgently needed a refresh—the ‘18’ stood for 18 months. By industry standards, that’s a healthy target. Except that it was never achieved. Instead, it took Tata Motors six years to finally get the vehicle out and the new Safari Storme was launched only in October 2012. Total money spent: About Rs 400 crore.
In the automotive business and especially in a cut-throat market like India, a mistake like this can prove to be quite costly. In the last six years, sales of utility vehicles in India have skyrocketed. The market has grown by almost four times to more than 5,53,000 units per year. In this same period, utility vehicles manufacturer Mahindra & Mahindra launched three completely new vehicles (Xylo, XUV 500 and Quanto) while refreshing its existing portfolio (Bolero and Thar). Even India’s largest car maker Maruti Suzuki, which was primarily a small car manufacturer, launched a hugely successful UV from scratch called Ertiga. There’s also Renault’s big bang entry into the SUV space with Duster, which has captured the fancy of Indian customers. Who was caught napping? Tata Motors. In a segment in which it enjoyed pole position just a few years back.
Then there is another way to lose ground—a dramatic flux in the top management team. Come to think of it, Karl Slym, who joined office in October 2012, is the only CEO (for its car business) that Tata Motors has had in a long time.
It all started with the Nano debacle and the exit of Rajiv Dube as head of the passenger car business in May 2010. This was soon after Carl Peter Forster came in as the global CEO of the company. Forster brought in Ralf Speth to head JLR. Prakash Telang was elevated from head of commercial vehicles business to MD, India operations. R Ramakrishnan, the champion of Tata’s successful takeover of South Korea’s Daewoo Motors in the commercial vehicles business, was air-lifted to take over Dube’s role and began reporting to Telang.
Soon, it was head of car product group Nitin Seth’s turn to leave and join Ashok Leyland. Till date, Seth has poached about 34 people from his former employer. Seth was soon replaced by Niraj Srivastava, regional manager (west) of the commercial vehicles business. Around the time of Seth’s exit, SG Saxena, head of Tata’s utility vehicles business, also quit to join JCB. In May 2011, Forster quit Tata Motors citing personal reasons. Telang retired in 2012. Srivastava quit last year to join Audi India.
So, for about three years, Tata’s car business was run by people who had made their career in the commercial vehicles business. It is not a surprise then that consultants believe that Tata’s passenger vehicle business has been run just like its commercial vehicles business.
“Look at their product refresh cycles. While competition has added products one after the other, Tata Motors must have used all the alphabets in the English language to launch one version after another of their old cars. That’s how you sell trucks not cars,” says a senior automotive consultant who did not want to be quoted.
A car is an aspirational purchase. A Tata vehicle is far from that. The connotations associated with it are ‘value for money’ and ‘taxi’. Almost all of Tata’s vehicles—Indica, Indigo, Sumo—are predominantly bought by fleet taxi owners. “Which is a good endorsement,” says Slym, “Because fleet buyers buy stuff that is good value for money and endurance. However, an overemphasis on fleet turns away the personal buyer. So this is the balance between what do you want as fleet and what do you want from a customer as aspiration, does he aspire to buy that car which he thinks as a taxi? So I think it is important for us to now have differentiation in our products.”
This problem manifests itself at the point of sale. Harsh Vardhan, a former JWT executive, is an independent brand consultant who has worked closely with Tata Motors’ dealer subsidiary Concorde Motors. He spent months speaking to prospective customers and studying their buying experiences. What did he find? “There are serious image confrontations at the point of sale. Everybody is on the same floor—the fleet taxi owner, the driver of a Sumo and this executive with his wife looking at the Indica. It is a bit of a let-down of the executive’s image which makes him think this car is not for me but for taxis,” he says.
Slym found another vexing issue. What does a Tata car stand for? “If Maruti launched something that’s got excellent fuel economy, the emphasis is on the fuel economy. So, therefore, you have to focus on your strengths. The emphasis has got to be on the car. And I think we have had a little bit of disconnect between the company and the customer,” he says.
Tata’s brand positioning has been at best confusing—‘more car per car’, ‘club class’, ‘reclaim your life’, ‘the real SUV’ and ‘a class apart’ are just a few examples. Scratch a bit more and one can find a more serious problem. Traditionally, there were three planks on which Tata Motors sold its vehicles: 1. Operating economics, aka diesel. 2. Cheap acquisition price. 3. Space.
“Today we have lost all three. Our dominance as the only diesel player is long gone. Across all our segments, both multinationals and Indian companies have vehicles which are competitively priced. And the market has moved from driving around large families to self-drive vehicles. There as a brand we have lost relevance,” says a Tata Motors official who did not want to be quoted.
Add to the above issues, the far larger problem where Tata’s product development machinery has failed to regularly churn out new products. Which leaves them today with a portfolio that could well have been from the early half of last decade. When was the last time Tata Motors launched a completely new vehicle? Slym adds, “This year, how many cars have seen growth? Only new cars, none of the old cars. When was my last new car launch? The Aria. Which was two years ago, so it has been a while. So that’s not in line with keeping your name in line with the minds of people. It has been a problem for us in identifying where and when we want our products.”
While Tata Motors does not release standalone results for its car business, experts estimate the company has invested more than Rs 5,000 crore in the Nano project. “Nano is not the whole and soul of your strategy. But for political motivations within the company, there was never a vision that we should have a portfolio of cars. Some of that will be value for money. Others which will be cool, young and yuppie. In that same space Maruti has seven brands, Hyundai has three while Tata has just one—the Indica. How do you expect the company to compete?” adds the former Tata Motors official quoted earlier.
Analysts are also sceptical. Motilal Oswal Securities’ Jinesh Gandhi says, “The new management has enough understanding and experience of the passenger vehicles business. But it will take at least three years to arrest the current situation. Given that the car business is a cash guzzler, it will require investments in new products and marketing. Most of that contribution will come from Jaguar Land Rover and the commercial vehicles business.”
On December 18, 2012, Slym got together the top 82 leaders of Tata Motors to roll out what he calls his ‘One Team, One Vision’ plan. It has a fairly obvious message: Let’s focus on the customer. Quite often large companies take this route of identifying a common vision document which everybody can relate to. Slym has done the same and he is pretty kicked about the result. “I was at Dharwad the other day and I asked the team at our all-employee meeting and they know the mission, they know the vision, they know the values, they are motivated, so that to me is a good sign that the people can articulate it and we have done a good job of rolling it out,” says Slym.
The man is a firm believer in the principal that an organisation should be able to maintain a healthy balance between short- and long-term objectives. Something that he found amiss at Tata Motors. “I think there are two words that sometimes don’t translate well together—there’s containment and countermeasure. Countermeasure stops the problem occurring at the root and containment stops it from getting out to wherever it is supposed to go. So I think there is a lot of containment things that we are doing at the moment to be able to protect while we put the countermeasure in place,” Slym adds.
His containment strategies can be summed up thus: Building an organisational structure that has accountability, fixing product planning, emphasis on quality and a strategy function that can plan for the future.
He’s begun with tweaking the supply chain first. “We didn’t have a single purchasing organisation which I think was a huge shortcoming for us because we miss out on the benefits of our scale, we confuse a lot of things that way, so we have now got M Venkatraman as head of purchasing.
Instead of having eight purchasing centres and buying things for specific plants, we have centralised it,” he adds. Venkatraman is an old GM hand and his appointment is in line with the top-level changes that have accompanied Slym’s arrival at Tata Motors. In October 2012, Ranjit Yadav, country head of Samsung India’s mobile & IT business, was brought in to replace R Ramakrishnan as president of the car business. Neeraj Garg, former director of sales and marketing at Volkswagen India, was appointed as vice president.
To fix issues in product planning and product management, Slym has changed their mandate and also ensured that the team reports directly to him. “We didn’t have a programme planning organisation, we had a programme monitoring or managing unit, as a result of which some of our vehicles have not been necessarily on time as we would like them,” he says.
It is a big learning from the Aria debacle. “People in the beginning have to identify what’s happening in the world today and the future. And then the customers’ expectations three years ahead is designed and engineered into the car and we don’t lose anything along the way and we don’t let three years become six years either,” Slym says.
If that were the case, the Aria should have been pitted right against Toyota Innova. He adds, “It looks quite similar and it sells quite some volumes in that area. There you go. But the Innova is Rs 9.95 lakh and the Aria was launched at Rs 14.5 lakh. So why do I pay Rs 5 lakh more than the Innova if we are looking at the same customer? You don’t. So that’s where we get back to the disconnect with the customer, not just at the point of sale.”
Poor quality has been a perennial issue with Tata’s passenger vehicles. Slym is attempting to fix that and has created a team under SB Bowankar (who will also report directly to him), whose sole job is to focus on improving quality. “You can’t expect the manufacturing guy to take care of quality. You have got to have the supplier delivering the right thing which is from our design and engineering etc, so we now have a quality function standalone reporting to me but looking at the full piece of quality from the very early design,” he adds.
Last but not the least is strategy. “I have been internally critical of the fact that in some places we haven’t got products where if we want to be a volume manufacturer we have got to have products. So we now have a strategy group that not only looks at products but also looks at our overall business strategy as well to make sure we have got binoculars on, as I call it, to see not tomorrow, 2013 or 2014 but what will happen in 2016, 17, 18 and how we are preparing for that. Whether that be a product opportunity, a country opportunity even legislation or fuel type and all those kind of things,” he says.
Most of these measures look fantastic on paper. But the question is how long before they can translate into something real on the ground? Slym knows this bit of the story thanks to the promises he has made to dealers. But how long will it take?
Slym says, “It is not just that piece on quality. It is also everything else. Some things have happened already but you know how long a vehicle development cycle takes, so therefore, a new vehicle coming to market will be a number of years. So those kind of things coming into the market which is new, new, new vehicles with platforms and things like that will be a number of years.” Is this going to be a case of too little, too late?
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Correction: This article has been updated with spelling corrections.
(This story appears in the 17 May, 2013 issue of Forbes India. To visit our Archives, click here.)
Comments 47
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PankajThanx Mr. Karl..... for focus on marketing
on Nov 20, 2013 -
Kanishk Yadav
when the respected M.D of tata motors mr. karl slim had promised to mr wasan to give answer on his problems of sales decline within in 90 days then why he didn\'t answer it in 90 days and according to this article he dindn\'t answered in 180 days that means completely 6 months what is the reason behind that ?
on Oct 30, 2013-
Sambit Bhattacharya
Dear Karthik, you forgot that Slym has joined Tata from GM. So he has also got all the fevers of Tata, say something, then forget. That\'s why Tata Motors is failing....
on Nov 3, 2013-
Kanishk Yadav
strongly agree with you mr. bhattacharya, but they have to finish this fever here only otherwise tata has to close their passenger car unit very soon , they didn\'t know what an executive has to face while selling out the tata product like indigo or whatever it is , i had face those problems from very near tata has to come out with their rigidness, and has to do some thing about it , if we don\'t go so far near about seven years before when people talk about tata it looks like that they are talking about strongness , strength , durability etc but now if we heard it is only waste of all your resources to buy a product, if you are going to buy a tata product ,i know this company can do it better but i don,t know why they are ignoring this
on Nov 5, 2013
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Nitin Kohli
Tata Motors agression and Talent cannot be questioned, but with experience of tata ownership for almost 9 years ... and working in same domain.. though some things what i notice is : 1. The structured mechanism is lacking where customer expectations in terms of service , sales and product can be captured and utilized , may it be customer feedback or complaint . 2. Dealer profitability through service , changing the mindset from sales driven to balanced business growth from sales and service . 3. Dealer process should be delinked as Customer Driven and Business driven 4. Tata brand is percieved as brand of low quality , which is key factor for First time users , ( India still has majority of FTU) 5. Holistic image needs an improvement where Customer percieve this as Package not a product .
on Oct 17, 2013-
Sambit Bhattacharya
At least you have got me right. I wanted to purchase Tata Indica as my first car arnd 7 yrs ago, but ended up in buying Alto. Today I am planning to buy Tata Manza \"Package\", not the \"Product\". Very true.
on Nov 3, 2013
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Sunil Kumar
I think this TATA Motors is a classic case of a company lacking in Strategic Management
on Oct 4, 2013 -
Karen S. Webb
Valid point made earlier. Is there a plan in place for Tata motors dealerships to maintenance and repair in the United States?
on Aug 1, 2013 -
Saahil
Compact sedan segment is the best buy at present in Indian market. Swift Dzire, Honda Amaze - both are doing reasonably well. However, irony is Tata Manza Diesel (after discounts) is priced same as what Dzire and Amaze all about. Despite same pricing, much spacious interiors, much premium sedan feel and recent price cut, Tata Motors is facing issue in selling Manza, even its selling lesser then Etios Diesel, despite been a superior product for all 3 cars source for comparison of Manza with etios http://www.mycarhelpline.com/index.php?option=com_easydiscuss
on Jul 17, 2013 -
Suresh
TATA can not succeed in the areas where service / after-sales-service is required. The philosophy of SELL it and FORGET it will only take them so far. Whether it is car or phone or consumer durables, the after sales service is non-existent. Nobody (TATA customers) would like to go back to TATA after their first experience with TATA Customer Care. No Corporate can do well if they can not retain their existing customers. Just having low price is not sufficient, to attract more customers, especially if the product is also of a very low quality . Most products (not just cars), low-cost or premium would have minor issues when mass produced and marketed. It is how you deal with these issues as a Corporate which would determine good and not-so-good Brands. Great brands have totally different philosophy of thinking couple of steps ahead to provide customers a great experience year after year for umpteen years before they are regarded as GREAT BRANDS. Hope someone from Tata Motors at least bothers to read these feedbacks?????
on Jul 6, 2013 -
Geok
Being an owner of 2 Tata cars over the past 7 years, I can very well say space in Tata cars is something no other cars can boast at in this price range. However, quality and service issues are evident and hitting the brand image of the company. As somebody mentioned in the thread, feedback is brushed under the carpet. The cars have huge potential but marketing and service pull it down to the bottom. If issues reported are fixed temporarily only until such time that the customer care calls up for feedback and after which it again surfaces, then that is a huge letdown. Instead of providing stop gap solutions to issues reported during service, it would make a mountain of difference if the issue is properly fixed and not just for a week or two. Karl has a big challenge on hand in not just ensuring that the product sells but also ensuring that the products sold are serviced properly. And this can happen only if the attitude across the company right from the product engineers to the service technician change their 'its-okay' attitude. I know friends who initially were planning to buy a Manza but backed out because of the attitude of the sales folks. If the sales rep says that the clutch in a demo car with 5000 kms on the odometer is bad because its a Tata car, you dont need to look far to know the root cause of the problems and a potential customer can only imagine what he might have to put up during service. Wishing Karl all the best.
on Jul 5, 2013 -
Kumar M
I have worked in TATA Dealership after my completion of my BE Automobile, It was my right decision taken to work with TATA Dealership, because these workshops are nothing but practical workshops. As a student you can see and learn all type of technical concerns in TATA dealerships. You cannot find a single car without any concerns, and concerns will repeat day by day. The support we get from the RSM's is amazing, because TATA HR will recruit a people who knows theoretically but not practically. When I was working with TATA Dealership I was fighting with RSM's to look to customers concerns, they never bother and proper solution is not given by them intime. RSM's will always blame dealership saying that it is a wrong diagnosis, i would like to suggest TATA Management kindly appoint a skilled persons who have already working in dealerships, so that they are better in understanding customers concerns. Really I am proud of me because as a BE Automobile Engineer, I have worked in all areas in the Dealership and agained sufficient knowledge about how to make the customer satisfy. Through my own skills and dealing with customers, today I am working for a branded company in Automobile dealership in India as a General Manager and our dealership is getting SSI and CSI scores more than the country level and our dealership customer retention is more than 85%. Dealership can make revenue is only the way to look of customer retention and references. 70% of our sales and services we get only through reference and 30% we get customers to retention customers references. If all dealership follow the same, I would like to say that dealership can generate more revenue and customers will be buying the same product YOY. At least know TATA motors can get up from sleep and listen to the customers voice and customers perception, by listening this still there is a scope to improve their dealerships. If TATA officials goes in the same direction, then you can see the end day because is it nearing to all TATA Dealerships. First thing is that TATA Motors has lost Mouth of Words, and they have lost premium segment customers. Even their employees (TATA Group) are not willing to take TATA Brand vehicles and they dont want to get into trouble. If you need real feedback, let TATA group officials can have a survey with their own employees, then they will come to know the reality. Hats off to Mr. Ratan Tata for giving car for cheaper price with cheapest quality maintained car to India people. TATA cars are purchase by the people who wants to suicide in his life or people want to lose their life only can buy a TATA car and travel in this car. Kindly take this feedback and practically visit the TATA Sales and Service dealership, and understand the customers needs and requirements. Then you will understand the market scenario. Kindly come out with quality cars with better features, then people will once again look for TATA Brand vehicles.
on Jul 5, 2013 -
Peter
I have been using an Indica Turbo for the past 7 year now. The car has not given up on me even ones. However there were some niggles that need attention ones in a while. Tata cars are good as long as the authorized service center guys just do the job. But they seldom does what they are supposed to do. What I hate in all TATA cars, Now that I own a Manza club class, is the fit and finish. After spending 9 lakks on the car, if you look closer at the corners and under carpets, you can see the inferior paint works and protruding metal pieces. Looking at the sercive center attitude compared to the last 7 year, I see a marginal improvement there. The only way TATA can see success with its wonderful portfolio of vehicles is to focus on quality workmanship, performance and a good service network. The problem with this company is right from the manufacturing until delivery and on there are quality issues. Still why people buy these cars? is because they see some value in the space and comfort it has to offer. Besides these there is nothing anyone can think off when it comes to TATA. I have heard many people say that Manza would have been sold like hot case if any other company other than TATA would have produced and sold it. I have been using the Manza for the past 7 months now and I am a happy customer with respect to the performance and space. Recently the car gave up on me and when the 24/7 service of TATA was called, they immediately responded to the location and even came down with a bottle of chilled water. Also hats off to them for taking my request of towing my car to my preferred workshop which otherwise is towed to the closest center. Things are improving, but for a significant change TATA should focus on the later.
on Jul 3, 2013 -
Pradeep
I am a owner of tata vehicle for around 8 yrs now. Let me shre my point of view, just after 3 months of buying the vehicle I felt cheated. Only thing that tata offers is a car which is cheapest in segment and has more space .. nothing more. At the entry level , indica is competing with santro, alto etc .. At that segment people look for ease of driving, pleasure to drive. Now Indica is a tough vehicle to drive as compared to others for a first time buyer. You damn can\'t figure out the lenght of it\'s bonnet and length/breadth of vehicle. A/c is horrible, if you switch on a/c your car loses it\'s power. Now some of these things are fixed. Tata don\'t care about after sales support. Every other car manufacturers go for recall of their cars and provide free replacement of parts if found faulty which is a nuisance for tata. If you go even to a maruti workshop, the type of courtesy and the env that they provide for a M800 owner is more than a manza owner. Who is at fault ? so poor condition of workshops, you come across bad cheating people having attitude looking at fooling you... No one to hear to your complaints. Does a customer wants this ? Na .. who wants to treated like this ? On top of that when you are going for servicing you are rubbing shoulders with taxi drivers all the time ? Does I want that ? No .. why should I buy another tata vehicle of course I recommend all my friends and relatives to stay away from tata ... BTW most of the dealers and workshops in delhi have closed in around 2-3 months .. Is there a hope left for tata or have they given up. I guess enough points for tata to ponder and act upon if they want ... else they would be doomed in car segment
on Jul 3, 2013 -
Dev Abhishek
I have been the proud, but somewhat disillusioned and dismayed owner of three Tata vehicles now. It was a national pride thing for me, since the Indica is largely an Indian engineered car, but national pride goes only so far. The car is still value for money, and safe, but Tatas have to address the fact that Indicas have more down time than other car-makers, and more trips to the workshop, even if overall cost of ownership is low. And please, the Manza deserves a bigger engine!
on Jul 2, 2013 -
Achin Juneja
There is a big disconnect between the company honchos and the dealers. Customer feedback regarding obvious manufacturing defects, is brushed under the carpet by \'Plant representatives\'. The problems don\'t go away if ignored. They have to be tackled head-on. Till this ostrich like approach persists, the company is only going one way: Down.
on Jul 2, 2013 -
Rao
what is bad thing for TATA is, people are treating its vehicles as taxi\'s. 1st it should come out from that image. They need to come up with new brand and that needs finest marketing strategy.
on Jun 17, 2013 -
Jitender Singh
main reason for decline in sale is \" word of mouth\", any one who buys tata car will never advice to his friends and relative to go for that car as due to poor quality he has suffered a lot. i have tata manza and every second month i have to take it to workshop to fix some or the other thing. same is the case with most of other fellow whom i interact at workshop. many of my friends and relative have taken my view before taking new car, i strongly advice all of them for not to go for tata cars. so untill and unless new head improves \" word of mouth\" tata motors will keep on going downhill
on Jun 11, 2013 -
Somesh Dutt
A fantastic article. You were able to piece each and every problem area which a huge organization like Tata is facing, some of which is visible while others are not. I really liked the entire article in totality as it gives me an insight about what Tata has been going through and where does it stand now after incorporating several changes.
on Jun 10, 2013 -
Jj
Tata makes diesel cars. Diesel price is getting closer to petrol. So why should someone buy a diesel car? If Tata can build cars to answer this question, then the numbers will improve.
on Jun 5, 2013 -
Rahul
If anyone from Tata Motor\'s top executives are reading .... Indian car market isn\'t a mature market as such, and a very cost AND image conscious one. Market research may look for logic, but logic isn\'t always (in fact rarely) what drives people. Take image. People don\'t buy Tata cars because of the image of a taxi. Oddly enough, the same reasoning is given for the Toyota Etios not selling too well. But in Europe, I have seen BMWs, Mercedes Benz E-class and Audi A4/6 as taxis. Yes, Europe has much higher standard of living, but apparently Europeans aren\'t finicky about buy a BMW or Audi because it\'s also commonly used as a taxi, are they ? India has a very class conscious public, thus a car predominantly seen as a taxi, is unlikely to find a buyer for a family car. Toyota tried in vain to steer away from the taxi image, by culling the Qualis and bringing in the Innova, only to have the Innova too picked up by fleet operators. Now that Swifts and Dzires too are being registered as taxis, let\'s wait and see if Swift/Dzire sales reduce in light of the taxi image. Now what does a commercial user want in a car ? 1. Dependability, reliability and durability : the more time a car spends on the road, the more money it makes. The more time a car spends off the road in a workshop, the more money it loses. A non-functional car makes fleet availability lower, affecting business , losing customers. 2. Cheap to maintain : easy availability and low cost of spares, wide service network so that repairs/service can be done anywhere and at low cost, with low turn-around time. 3. Space and comfort : Would a customer want a cramped, uncomfortable car , or a spacious, comfortable one ? If you had a fleet of cramped, uncomfortable cars and a rival had a fleet for more spacious, comfortable cars , who would get more customers ? So - add that up and infer, that Indian customer forgoes a car that is reliable and durable, cheap to maintain, and spacious in favour of cars that are more expensive to buy and maintain, possibly very cramped ( Swift , Dzire ) - only because they are more upmarket. And yet , Suzuki loses out premium car sales ( Kizashi , Baleno , Grand Vitara ), because it is seen as a cheap, mass-market brand compared to the Hondas and Hyundais, even. Where does that put Tata Motors ? It slots in below Maruti - and nearly two classes/slots below Honda/Hyundai , the latter successfully selling the expensive Verna despite being a cheap Asian brand as per international standards ! The customer\'s mindspace is a tricky one. Money isn\'t plentiful for the Indian customer, so not only are we cost-conscious, but very image conscious in order to appear richer than we are ! What Tata Motors needs, is a re-invention of the brand name, or a new brand name ; like what Infiniti is to Nissan or Lexus is to Toyota. And besides the quality part, segregate commercial buyers from family/individuals as much as possible - not just at the showroom but also product lines. And new products, that are well built and upmarket inside out, and in no way reminiscent of the legacy Tata vehicles.
on Jun 4, 2013 -
Yuvaraj
The main problem is design, all products (Indica, Indigo, Indigo CS, Vista, Manza, and Aria) are looking more or less same especially frontal section. Why should anyone go for high end product if it is nothing more than just like grown up brother. Tata has to design at least one full fledged entry level sedan. Trunk integration is awful in Indigo and Manza. Look at Volkswagen Vento(Polo) and Jetta(Golf) their trunk integration is so much seamless. Diesel Nano is need of the hour.
on Jun 4, 2013 -
Sunup
Another big let down for TATA cars is the way they treat their customers as guinea pigs. The current 2012 Nano is far more reliable than the original one. Same with other models like Indica, with the current one having manifold reliability over the original Indica. This is not so with other car manufacturers and their models. So people will tend to hesitate to buy Tata cars. Already there is talk of a refreshed 2013 Nano and other models like Indigo ECS. So people will wait for them to arrive, thus driving down sales of the current stock southwards. Also, they are very slow in making decisions and bringing out models. If a diesel Nano was available from late 2012 onwards, the Nano story would have been different now. Now by the time the diesel Nano comes out, diesel prices would go up even further and the tilt towards diesel cars would die down further. So there goes another opportunity. Same with an automatic/CVT version for the Nano. An affordable AT city car would have done wonders to their sales. But they didn't think on those lines too. So it's not Slym, but only God Almighty who can save Tata Motors' Indian operations.
on Jun 4, 2013 -
Shyamsunder
Indians are proud of the brand and want to own, the company needs to ensure reliability. A four year maintenance free period and sleeker models will do the trick. In Bangalore especially people are weary of once \'cheap to maintain\' maruti bills. My friend paid 9000 for Swift service. Honda spares aren\'t widely available. Tata needs to research on such chinks and exploit it.
on Jun 4, 2013 -
Raphel Lazar
The main problem is not discussed here. Just look at the quality, its below average. Every 6 out of 10 Indicas back panel is deformed with in one year of ON ROAD. This is pathetic. Its just going out of shape, loosing finish, which drives sensible buyers, and tata gets only those buyers who looks for Diesel and a body with 4 wheels. Chnage the quality perception, rest will follow.
on Jun 4, 2013 -
Vikesh
Brilliant article, I think Mr Slym has rightly pin pointed the need of the hour strategy Product planning, Quality deployment, Purchasing in all One Team one Vision, Also rightly pointed car business being run by commercial vehicle guys, The new management has enough understanding and experience of the passenger vehicles business. But it will take at least three years to arrest the current situation. Given that the car business is a cash guzzler, it will require investments in new products and marketing.
on Jun 4, 2013 -
Pavan
Brilliant article and Tata really deserves to be at the top of the table . Aria is a top notch product and yet it fails just because of a tata badge on it. Tough times ahead for Tata and i just hope they can come out of this mess pavan Proud owner of Safari :)
on Jun 4, 2013 -
Tipoficeburg
Thanx Mr. Karl.....for analysing TATA MOTORS CVBU
on May 18, 2013 -
Adriaenssen
Look no further! Tata has the answer in-house: http://www.zigwheels.com/news-features/news/jaguar-ftype-awarded-2013-world-car-design-of-the-year/16375/
on May 17, 2013 -
Ashok
Tata Steel has just taken a $ 1.3 billion impairment charge. Indian Hotels\' acquisition of shares in Oriental Hotels has lost value. Ratan Tata\'s legacy will have to be carefully evaluated.
on May 17, 2013 -
Adriaenssen
@ Sandeep, be proud of Tata, be proud of your country and the achievements of its captains of industry. In Europe taxi drivers prefer Mercedes Benz, see my point?
on May 16, 2013-
Sandeep
Adria,Iam just highliting the point of personal car buyers aversion to TATA vehicles. No way I mean derogatory to my country nor Tata.Tata is a symbol of legacy and I know that.
on May 17, 2013-
Adriaenssen
Sandeep, then maybe this is the right occasion to find out why. Tata Motors built the first completely indigenous car, the Indica. They have a range of private vehicles and SUV\'s that I find quite adapted to the Indian market. What is the reason of the \"aversion\" you have mentioned? How can this be overcome? I know this is really TML\'s marketing department\'s job, but I can\'t help ;-)
on May 17, 2013
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Anish
"The new MD heard him out patiently. At the end of the meeting, which lasted about 90 minutes, Slym said, "No, Mr Wasan, don't give up. Give me 90 days and I will do something. If you still think your dealership is not viable, then you are free to go." Slym's promise of 90 days ended in December 2012. It is now actually more than 180 days but Wasan hasn't heard from him." Once Tata motor's state of affairs understood by Karl Slym , he himself might have thought 9000 days may not be sufficient for him to bring the company on track .
on May 16, 2013 -
Sandeep
Tata car means taxi car, and it fits the bill as that\'s what taxi guys want..more car per car.That\'s the standard notion and the personal buyers backstep because they don\'t get the premium \"feel\" with what other car owners receive in society.In India car buyers are upper middle class guys and buying TATA let\'s them down in their circle. Tata Motors, as I have understood from the article works like govt company,out of focus.
on May 16, 2013 -
Lucas Pb Adriaenssen
Dear, Allow a non-Indian to make a comment. I have followed Tata Motors for 9 years now, since I introduced MDI's compressed air technology to Mr Ratan Tata himself. Chairman fully understood the tremendous potential of this clean and affordable technology for the economic and environmental situation of His country. At his arrival at TML I also wrote a short memo to Mr Slym. Nano failed due to wrong marketing and too high total cost of ownership for its targeted customers. Combine the two elements above and you have the answer Chairman would have put in action.
on May 16, 2013-
Xyz
It is not true, your technology to put plainly was \'a lot of hot air\', it did not stand independent evaluation. Is there wonder no one else is interested in compressed air technology.
on May 18, 2013
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Mukesh Jain
I think, now TATA is going in right direction as far as we hear in the atmosphere..God knows what excatly will come out and when.. One thing is sure that Competition is very aggressive and they will also not leave any stone unturned in the business...TATA needs to work with Fourtime speed and first time right to turn around in car segment...CV market is also becmoing challening every year passing by...for TATA its now or never game...We have many examples like Escorts Tractors, now vanished within no time...
on May 16, 2013 -
Sachi Mohanty
\"The man is a firm believer in the principal\" Or \'principle\'? I am sad to realize that Tata Motors is in such a sorry state of affairs. They got to really innovate in a car market where competition is so cut throat. Who\'ll come up with a car that has it entire top part built from color-changing composite-plastic material combined with carbon-fiber or something for strength? Think of those windows on the new airplanes? I think it\'s the Dreamliner that has those fun windows. Or is it the 380? Tesla is the way of the future! If not those battery packs, at least go for its sleek looks.
on May 16, 2013 -
Dheeraj
Don\'t know about Tata\'s quality but Forbes needs to do a better job in editing its content.. believe spelled as belive and space spelled as pace.. something is wrong. Forbes must deliver better.
on May 15, 2013
